THE country’s trade deficit narrowed by nearly 40 percent in February, according to data released by the Philippine Statistics Authority (PSA) on Wednesday.
Data showed the balance of trade in goods (BoT-G) in February 2020 posted a $1.66-billion deficit, lower by 39.4 percent than the $2.73-billion deficit in February 2019.
This is the seventh consecutive month that the trade deficit has been narrowing by double digits. The trend started in August 2019 when the BOT-G narrowed by 16.5 percent.
The decline continued in September 2019 at 15.3 percent; October 2019, 19.1 percent; November 2019, 10.4 percent; December 2019, 29 percent; and January 2020, 18 percent.
In an email, PSA told BusinessMirror that the decline in the trade deficit was the lowest since July 2017 with a decline of 45 percent and value of $12.97 billion deficit.
“The public health emergency we are experiencing emphasizes the need to fast-track reforms to facilitate trade by reducing transaction costs. We must be creative in finding ways to ease the movement of goods and services while we continue to implement measures to combat Covid-19 (coronavirus 2019),” Socioeconomic Planning Secretary Ernesto M. Pernia said in a statement.
Meanwhile, the PSA data also showed the country’s total external trade in goods contracted 5.9 percent to $12.46 billion in February 2020 from the $13.24-billion external trade in February 2019.
In a statement, the National Economic and Development Authority (Neda) said the decline in overall external trade performance owed to the 11.6-percent decline in imports, even as exports managed to post a positive growth of 2.8 percent.
Data showed that export earnings reached $5.4 billion or 43.4 percent of total external trade, while import receipts reached $7.06 billion or 56.6 percent of total trade.
In February 2020, Neda said merchandise exports continued to expand, albeit slower, with increased shipments of agro-based products, mineral products, petroleum products and manufactured products.
Neda said import payments fell due to lower order for capital goods, mineral fuels and lubricants, consumer goods, and raw material and intermediate goods.
“We must aggressively pursue and prioritize the digitization of import and export documents, with the institutionalization of the TradeNet system as well as the utilization of cashless payments for all government services,” he said.
In order to boost the country’s external trade performance, he said the government has already extended the payment of rent, bills and utilities.
Relief for airlines
However, Pernia said, businesses should also be supported in restarting their operations and defraying the cost of lost revenues.
The Neda chief also said the government can extend temporary reprieve from demurrage and customs fees or waiving of navigational charges for the airline industry — among the hardest hit with the restrictions on mobility.
“The country’s experience in responding to the Covid-19 pandemic has brought home the crucial importance of synergy of efforts of the government, private sector and citizens. Such cooperation in making limited resources work should be part of the new normal that will emerge after this pandemic,” Pernia stressed.
Image credits: Nonie Reyes